A bad case of SIFMA

DavidWeidner

BOCA RATON, Fla. (MarketWatch) -- The midterm elections may have swayed the balance of power in Washington, but at a securities-industry meeting in Florida, it was business as usual.

The change is Congress is not a problem, according to Securities Industry and Financial Markets Co-Chairman Micah Green. Though Democrats will take control of key committees, Green said Thursday that the association would soldier ahead even if Rep. Barney Frank, D.-Mass., is going to be chairman of the House Financial Services Committee.

"The PAC [money] will be utilized across the board," he said, adding that he believed Democrats would defend the need for companies to raise capital. "It's not a partisan issue."

Other participants, such as NYSE Group Inc.
NYSE
Chief Executive John Thain, were a little more downbeat. Democrats, he said, would likely shelve tort reform, one of the major hurdles that Thain argued was keeping foreign companies from listing in the U.S. markets.

"I'm not optimistic about [tort reform]," he said. "I'm even less optimistic since Tuesday. ... We're not going to get to that for at least the next couple of years."

Merger mouthful

The combination between the Securities Industry and Bond Market associations has its critics, especially when it comes to the acronym of the organization, SIFMA. Co-Chairman Ed Forst, chief administrative officer at Goldman Sachs Group Inc.
GS, -0.61%
said that he "heard a lot of wonderful things about that."

But he brought brokers here worse news: the Asian branch is called ASIFMA. Sounds like something you might catch in Bangkok.

Thain said that the acronym "does lead you to think of some unpleasant diseases." NASD Chairman Mary Schapiro added that she'd heard "a lot of jokes" about SIFMA. She wouldn't share any, she said, because she didn't want people to get the impression regulators had a sense of humor.

Securities and Exchange Commission Chairman Christopher Cox began his address Friday by welcoming SIFMA members to a "meeting on acronym improvement."

Observers also noted that the new logo -- an attempt to show the unification of the BMA and SIA by separating a green and blue square with the line from a stock chart -- also went awry. It seems that the line takes a precipitous corrective dip in the middle.

"As you can tell we didn't spend a lot of time, or money, on it," said James Gorman, the co-chairman of SIFMA.

Hedging hedge funds

SIFMA as an organization may be against too many regulators, but is undecided on its position regarding the hedge-fund industry.

The question took on more meaning Thursday after Fortress Investment Group filed for an initial public offering -- the first such IPO of its kind. See full story.

Ellyn McColgan, president of Fidelity Brokerage Co., said that SIFMA was weighing the benefit of hedge funds to member firms against the dangers they may pose to the market. She said that the association would eventually be asked by regulators for its position.

Micah Green, co-chairman of SIFMA, said that the group was still grappling over the question of whether hedge funds were a threat to the markets.

"I don't know if it's a problem," he added. "If it is, what is the problem?"

With all of the talk in Boca Raton about consolidating regulators, it was the one who is moving to Albany, N.Y., who garnered some chuckles here Thursday.

In his address to the securities industry, Thain was to the point. "We have too many regulators. ... We don't need [them] trying to figure out who's the toughest cop on the block," he said, adding coyly: "We in New York may have done our part by electing a new governor."

Gorman and Forst also formed their own mutual-admiration society when they presented one another with appreciation awards for their service to the association. "It's a little hokey, but it's OK," Gorman said.

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